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Emmanuel Onwubiko
The phenomenal fall from grace to grass of one of Europe’s best known travel agencies known as Thomas Cook can be compared with the fall of a giant. Thomas Cook is the second largest tour operator in Europe just after TUI AG Worldwide which generated a revenue of around 19.52 billion Euros during the fiscal year ending Sep- tember 30th 2018 according to a source called STATISTA.
Perhaps, the liquidation of this iconic Britishborn company with a proud British history can be likened to the defeat of Goliath by David in the Old Testament. I chose to compare the collapse with the fall of Goliath by David because of the strong history of global best practices that had trailed this company before it snowballed into a badly managed business concern. In my many years of travels to the United Kingdom spanning nearly two decades, I actually perceived Thomas cook as a national asset of Great Britain not until the bubble burst earlier today and about 600,000 tourists of the company left stranded all across the World with Tunisia announcing that Thomas cook owes it $60 million just as 22,000 employees have been thrown into the uncertainty of the Labour market. The fall of this giant compelled this writer to ask questions about how in Nigeria so many companies had collapsed especially in the banking industry but there was this void regarding paying off de- positors who lost huge amounts of cash in these collapsed banking institutions numbering over 40 in the 1990s which I will endeavour to reel out towards the end of this piece. We will also ask the Nigerian government to learn from the British government how to care for her citizens whenever private firms collapsed and leaving the clients who are citizens in terrible circumstances.
These are the collective historicity of this iconic British company called Thomas Cook founded by Thomas Cook (22 November 1808-18th July 1892) as compiled by the Europe based agency reporters called Reuters. In 1841 – Thomas Cook organized his first excursion, a rail journey from Leicester in central England to the neighboring town of Loughborough. A special train carries some 500 passengers a distance of 12 miles and back for a temperance (anti-alcohol) meeting. In 1855 – Thomas Cook’s first continental tour. He takes two parties from the eastern English port of Harwich to Antwerp, then to Brussels, Cologne, Heidelberg, Strasbourg and, finally, to Paris for the International Exhibition. Cook offers a complete holiday “package” (comprising travel, accommodation and food) for the first time. Thomas also offers a foreign exchange service for the first time. 1865 – Thomas Cook opens his first high-street shop in Fleet Street, London. 1874 – Thomas Cook launches “Cook’s Circular Note” a precursor of the travelers’ cheque, in New York. 1919 – Thos Cook & Son, as the company was then known, is the first travel agent in Britain to advertise pleasure trips by air. In 1948 – Becomes state-owned under the British Transport Holding Company. 1972 – Priva- tized and bought by a consortium of Britain’s Mid- land Bank, Trust House Forte and the Automobile Association. 1990 – Thomas Cook becomes the world’s leading foreign exchange retailer when it acquires the retail foreign exchange operations of Deak International.
September 2019 – Thomas Cook seeks an ad- ditional 200 million pounds to see the company through the winter season when business is slow. Sept. 22, 2019 – Thomas Cook executives meet lenders and creditors in London to try to thrash out a last-ditch deal to keep the company afloat. Sept. 23, 2019 – Thomas Cook announces collapse after it failed to secure a rescue package. CEO is- sues apology. So going through these illustrious trajectories as captured by Reuters, an observer is left asking to know what really went wrong? Was the company badly managed or has it outlived It’s relevance? A commentator was quick to state that it’s been a long journey for travel firm Thomas Cook since its formation in rural Leicestershire during the early Victorian era.
As reported, the firm’s fate was sealed by a number of factors: financial, social and even meteorological. As well as weather issues, and stiff competition from online travel agents and lowcost airlines, there were other disruptive factors, including political unrest around the world, so reports experts with considerable focus on operations of tour companies.
The writer says also that in addition, many holi-daymakers had become used to putting together their own holidays and not using travel agents.
This explains the difficulty the dying firm witnessed just before it collapsed when it couldn’t be bailed out which means that the century old business model is no longer profitable.
And so as recorded by business reporters, last summer, shares in Thomas Cook were trading at just below 150p. But after a series of profit warnings, the price had fallen to just a fraction of that. Earlier this year, analysts at Citigroup bank described the travel firm’s shares as “worthless”.
The downward trends continued even as it was stated that in May, Thomas Cook reported a £1.5bn loss for the first half of its financial year, with £1.1bn of the loss caused by the decision to write down the value of My Travel, the business it merged with in 2007. Added to these facts is the fact that, it warned of “further headwinds” for the rest of the year and said there was “now little doubt” that Brexit had caused customers to delay their summer holiday plans. The egg heads in this company realising the inevitable fate that may befall it, started to figure out possible bailout op- tions which never worked any way. The reporters said that when it was becoming clear that it won’t survive for too long under its former identity, the company then put its airline up for sale in an at- tempt to raise badly-needed funds. Thomas Cook later announced it was in advanced talks with its banks and largest shareholder, China’s Fosun.
The troubled operator was said to have hoped to seal a rescue led by Fosun, but the creditor banks issued a last-minute demand that the travel company find an extra £200m, which it was un- able to do.The company’s boss, Peter Fankhauser, said the firm had “worked exhaustively” to salvage the rescue package and it was “deeply distressing” that it could not be saved. For Thomas Cook’s un- fortunate staff, customers and shareholders, his- tory has come full circle, so concludes a financial analyst who sounded apocalyptic.
Observers were quick to remind us that eight years ago, the company lurched perilously close to the edge of insolvency after trading turned sour. It was pulled back from the brink by an emergency loan from a group of banks, led by Royal Bank of Scotland – ironically the same bank whose demand for extra money appears to have sunk the company this time.
Onwubiko writes from Abuja
